RBI to conduct OMO buys worth Rs 10K crore today

OMO purchases are undertaken to ease liquidity in the system while OMO sales are done to remove excess liquidity.

The RBI had earlier this month announced that it will be coming out with concept paper on P2P lending, saying it has shown an accelerated growth over the last one year.

The RBI has been conducting OMO purchases in a significant manner since the last few months, especially in March, when the system was witnessing considerable crunch in liquidity.

The Reserve Bank of India (RBI) will conduct open market operations (OMO) purchase of government securities worth R10,000 crore on Tuesday.

The central bank will be conducting auctions to purchase five government securities (G-sec) — 7.28 per cent G-sec 2019, 7.16 per cent G-sec 2023, 7.72 per cent G-sec 2025, 8.26 per cent G-sec 2027, and 9.20 per cent G-sec 2030.

OMO purchases are undertaken to ease liquidity in the system while OMO sales are done to remove excess liquidity.

Story continues below this ad

The RBI has been conducting OMO purchases in a significant manner since the last few months, especially in March, when the system was witnessing considerable crunch in liquidity.

[related-post]

However, in recent times, liquidity conditions seem to have eased, which is evident from the fact that call money rates have remained low. The call rate last week fell to almost three-year low of 6.337 per cent.

The call rate is the rate at which banks lend overnight money to each other, and any surge in this rate is a reflection of a possible lack of liquidity in the system. In the April monetary policy, the central bank had introduced a slew of measures to ease liquidity in the system. The RBI said it would progressively lower the average ex-ante liquidity deficit in the system to a position closer to neutrality. The regulator has been keeping the liquidity shortfall equivalent to 1per cent of banks’ net demand and time liabilities (NDTL). FE

WATCH INDIAN EXPRESS VIDEOS HERE

In Odisha, Modi mounts ‘loot tantra-vs-bachat utsav’ attack on Congress over GST

India2 hr ago

Prime Minister Narendra Modi Saturday hailed the revised Goods and Services Tax (GST) structures, saying the era of “double bachat (saving) and double kamai (income)” has arrived under the Bharatiya Janata Party rule. Addressing the ' Namo Yuva Samabesh' in Jharsuguda, Modi accused the Congress of indulging in “loot tantra (tactics)” while in power.

View all shorts

Live Blog

PHOTOS